In a remarkable achievement, Bangladesh has fulfilled all three eligibility criteria for graduation from the UN's Least Developed Countries (LDC) list for the first time and is on track to be officially recognised as a developing country in 2024. Poverty rates in recent years have demonstrated an impressive steady improvement, falling by about 1.7 percentage points per year.
Despite progress, extreme poverty, discrimination, and exclusion of marginalised people persist. The poverty rate in Bangladesh is 24.3%, and the extreme poverty rate is 12.9%, according to the Bangladesh Bureau of Statistics (BBS). Around 20 million extremely poor people depend on manual labour, facing difficulties in finding regular employment and making ends meet. This situation traps them in a vicious cycle of malnutrition.
In regard to gender inequality, women are more likely to live in extreme poverty than men and bear a disproportionate share of the effects. An estimated 11% of rural families are female-headed, but around 28% of them live in extreme poverty in terms of socio-economic and nutritional status. Despite improvement in children's nutritional status over the past decade, stunting in children under five in rural areas remains 20% higher than in urban areas.
Besides, more than 70% of the population is vulnerable to climatic shocks such as floods, droughts, cyclones, salinity intrusion, and sea-level rise. Some areas are facing specific climatic, economic and socio-political challenges. Water-logging and salinisation compromise the water and land management of the poor in the southwest. The north-western parts reel from droughts and river erosion, while the central northern region experiences seasonal flooding.
Then came the Covid-19 pandemic. Apart from causing fatalities and illnesses, it dealt a heavy blow to the world economy, shrinking its growth, according to the IMF, by 6% compared to the previous forecast. Bangladesh lost about 0.2-0.4% of its GDP, estimates the Asian Development Bank. According to a Brac study, extreme poverty rose by 60% with the advent of the pandemic.
It is the fate of these people – the poor, the extremely poor and the disadvantaged – that the Palli Karma-Sahayak Foundation (PKSF) has been working to change since its inception in 1990. To generate employment for alleviating poverty in a sustainable manner and ensuring human dignity for all, this government-established apex development agency has been promoting sustained pathways out of extreme poverty since the early 2000s.
Notable among the PKSF's projects to this end is the Financial Services for the Poorest (FSP), the Microfinance Support Intervention for FSV HD and Ultra-Poor Beneficiaries, the Programmed Initiatives for Monga Eradication (Prime), and the UPP-Ujjibito.
Enriched with the learnings from these projects, PKSF launched the Pathways to Prosperity for Extremely Poor People (PPEPP) project in 2019 with support from the UK's Foreign, Commonwealth & Development Office (FCDO) and the European Union (EU). Since then, PPEPP has made remarkable progress.
In the participant households, the per capita income rose to Tk 1,968 from Tk 1,162, the per capita expenditures to Tk 1,585 from Tk 1,197, and the average household savings to Tk2,431 from Tk2,275. Besides, dietary diversity, food security, and resilience to shocks improved during the period.
Soon after the project's inception, the coronavirus pandemic sent the world economy into disarray. As a result, the extremely poor households participating in the PPEPP project faced a more acute financial and food crisis alongside already spiking health-related concerns. In response, the project floated an Emergency Assistance Program (EAP) for 30,700 extremely poor households, providing each household with Tk9,000 in grants, which they used to purchase emergency supplies and defray medical expenses. Over half of them invested the cash in income-generating activities.
In October 2022, the project took up a new name, PPEPP-EU, when the EU became the sole financier. The objective was slightly modified to enable extremely poor households to exit from extreme poverty and make significant progress towards prosperity. The specific objectives now include -
To create enabling environment for 215,000 extremely poor households to increase income through establishing diversified Income Generating Activities and improve their asset base;
To enable those households to ensure their food security;
To ensure nutritional support to pregnant and lactating women, adolescent girls and children U-5 of the organised extremely poor households;
To ensure women of organised extremely poor households experience a significant change in their social status and ability to make decisions about their lives; and
Increase the resilience of extremely poor households to climate change and other shocks.
The EU will provide about €23 million to PKSF to implement the PPEPP-EU in 145 unions of 34 upazilas of 12 districts spread over the north-western river basin area, the north-eastern haor area, the south-western salinity-prone coastal area, and some areas inhabited by ethnic minorities.
To address the multidimensional nature of poverty, the project is providing a carefully sequenced package of livelihoods, nutrition, and community mobilisation services and is addressing three cross-cutting issues -- disaster and climate change, disability inclusion, and women empowerment.
With rising inflation and cost of living, the extremely poor are more vulnerable now than ever. The EU's decision to help the PPEPP continue at this point in time is undoubtedly a blessing for the impoverished people of Bangladesh.
Dr Nomita Halder ndc is the Managing Director of Palli Karma-Sahayak Foundation (PKSF) and a former Secretary, Government of Bangladesh.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.